Fitch: If Strait of Hormuz Remains Closed, China's GDP Growth May Fall to 3.8%
Rating agency Fitch predicts China's GDP growth at 4.3% for the year but warns that if the Strait of Hormuz remains closed into the second quarter, growth could fall to 3.8%. Key challenges include weak demand and external pressures from the US-Iran conflict.
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- 📰 Published: April 20, 2026 at 16:25
- 🔍 Collected: April 20, 2026 at 17:01 (36 min after Published)
- 🤖 AI Analyzed: April 20, 2026 at 17:38 (36 min after Collected)
Taipei (Central News Agency) - Rating agency Fitch stated recently on its official website that China's economic current main challenge remains persistently weak demand, forecasting a real GDP growth rate of 4.3% for this year. However, under the adverse scenario where the Strait of Hormuz remains closed into the second quarter, economic growth could fall to 3.8%.
Fitch Ratings pointed out that China's chemical industry is particularly noteworthy, as tightening crude oil, naphtha, and LPG markets will push up raw material costs and suppress capacity utilization rates, especially for non-integrated producers reliant on imports.
Furthermore, downstream industries in oil and gas also face margin pressure. However, large government-related enterprises and integrated groups have a stronger ability to absorb shocks.
Fitch stated that China's government policy mix may continue to lean towards the supply side rather than the demand side, thereby compressing the space for household spending towards a stronger recovery. The easing effect of consumption-boosting measures may be minimal, while industrial upgrading and manufacturing support policies could lead to capacity expansion faster than demand improvement, thus increasing debt pressure and weakening pricing power.
Fitch stated that the real estate market continues to drag down credit conditions across industries. Recent sales data for commodity housing continues to show weakness, with sales expected to fall by 7% to 8% this year. Relaxing policies may only produce a weak and uneven effect. (Editor: Zhou Huiying / Qiu Guoqiang) 1150420
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Fitch Ratings pointed out that China's chemical industry is particularly noteworthy, as tightening crude oil, naphtha, and LPG markets will push up raw material costs and suppress capacity utilization rates, especially for non-integrated producers reliant on imports.
Furthermore, downstream industries in oil and gas also face margin pressure. However, large government-related enterprises and integrated groups have a stronger ability to absorb shocks.
Fitch stated that China's government policy mix may continue to lean towards the supply side rather than the demand side, thereby compressing the space for household spending towards a stronger recovery. The easing effect of consumption-boosting measures may be minimal, while industrial upgrading and manufacturing support policies could lead to capacity expansion faster than demand improvement, thus increasing debt pressure and weakening pricing power.
Fitch stated that the real estate market continues to drag down credit conditions across industries. Recent sales data for commodity housing continues to show weakness, with sales expected to fall by 7% to 8% this year. Relaxing policies may only produce a weak and uneven effect. (Editor: Zhou Huiying / Qiu Guoqiang) 1150420
Stand with the facts. Every sponsorship is a force to safeguard press freedom.
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Text, images, and videos on this website may not be reproduced, publicly broadcast, or publicly transmitted and used without authorization.